Giving local governments the power of the purse

Tuesday, February 5, 2013 - 12:01 am

Let Hoosiers decide how their priorities should be funded.

The Indiana General Assembly has previously flatly refused a request from Marion and Hamilton counties for a mass-transit tax referendum. But the mood seems to have changed this year. A bill allowing the referendum passed the House Roads and Transportation Committee 11-1 last week. There is still a long way to go – it must also get through the House Ways and Means Committee, and there is likely to be more opposition in the Senate – but there is at least a chance a bill will hit the governor’s desk this year.

The question of the hour is: If a bill does make it to Gov. Mike Pence, will he sign it? He has, after all, signed Americans for Tax Reform’s Grover Norquist’s “no new taxes” pledge, and this could end up raising $1.3 billion more in central Indiana.

He certainly should sign it.

Yes, it could lead to a local income tax hike of 0.3 percent to expand bus and rail service to give the greater Indianapolis area a “world-class transit system.” A recent poll showed a majority in the affected area would approve the tax, and 7,800 people have signed petitions encouraging lawmakers to allow the referendum. But there doesn’t have to be a tax increase. The bill would merely let the voters who would be affected by the tax increase and would benefit from the improvement project decide for themselves.

That’s something the state should do more of – let cities and counties have more authority to decide their own fates and more power to determine how projects they think they need are paid for. The point isn’t whether central Indiana needs an improved transit system but whether its citizens get to decide if they do. Almost every local government in Indiana has a project or two the need more home rule over.

But giving in to home rule has been a hit-or-miss affair, and the state is especially reluctant to give up control of the purse strings. But that is precisely the control that is most needed.

So, yes, the governor should sign. It is not breaking a no-tax pledge to give Hoosiers more power to decide their own fates.

And Norquist should stay out of it, too. His fierce anti-tax crusade has added a valuable component to the national dialogue on government debt (although it hasn’t solved the dilemma of Americans wanting more government than they’re willing to pay for). But local problems are best solved by the people who know them best because they are closest to them.

They’re closer to the voters, too. If they go too far and spend money that the voters don’t want them to, it’s very easy to kick them out and try again.